US Economy Grew 3.2 Percent in Third Quarter

The U.S. economy grew faster in the third quarter than initially estimated, expanding at its strongest pace in two years in a rebound from a weak first half of 2016.

Total economic output, also known as gross domestic product, expanded at a 3.2 percent annual pace from July through September, the Commerce Department said Tuesday.

The figure was up from an initial estimate of 2.9 percent and the best performance since the economy expanded at a 5 percent annual rate in the third quarter of 2014.

The Commerce Department will release a final estimate of third quarter growth next month.

The solid growth comes after the economy struggled through the first half of the year, expanding at just a 0.8 percent rate in the first quarter and improving somewhat to a still-lackluster 1.4 percent in the second quarter.

With analysts expecting fourth-quarter growth also to top 3 percent, the economy appears ripe for another interest rate increase by the Federal Reserve to head off a potential jump in inflation.

Fed monetary policymakers have signaled they will nudge up the central banks benchmark short term rate at their Dec. 13-14 meeting.

A key reason for the upward revision in third quarter growth was stronger consumer spending.